Buying from Liquidation Auction Wholesale Suppliers: The Facts
If you are planning to start an online selling business, whether full-time or as a part-time endeavor to earn extra cash, you should consider sourcing surplus merchandise from online liquidation auctions. These products can be purchased at prices even lower than wholesale prices and can give you a competitive edge. This strategy can provide more profits compared to the traditional approach of purchasing brand new items from several different wholesalers.
What is Surplus Merchandise?
Surplus merchandise consists of items from shelf pulls or those returned by customers because mistakes during shipment or damage in transport, or else because customers simply have changed their minds for whatever reason. For legal reasons, these products can no longer be sold through normal channels and retailers need to dispose of this surplus inventory in order to free up storage space for incoming products. The retailers usually sell these products or surplus inventory through specialist liquidation companies who then sell them on to marketplace sellers or smaller businesses. This is where you come in.
Finding a Niche Market
If you are just starting in the online reselling business, it is important to find a niche market segment that is undersupplied but has a strong demand. You must conduct thorough research of the market conditions and evaluate the supply and demand conditions of your preferred market segment. The advantages of getting into a niche market are several. These include having less competition and the availability of a sufficient number of potential customers. This will help you secure more sales and bring you more profits.
Here are some examples of niche markets in 2019, with products that are currently in very high demand:
- Phone accessories – the smartphone accessories market is to grow $108 billion by 2022
- LED lighting – the LED market is expected to grow 13% annually and reach $55 billion by 2022.
- Bluetooth speakers – the market for wireless speakers is projected to grow to $31.80 billion by 2023.
- Shapewear – this market is expected to grow to $5.6 billion by 2022.
- Drones and accessories – this is already a $5 billion industry.
Sourcing the Merchandise
In sourcing your merchandise, you should be looking for stock from top retailers because they can provide the lowest prices for wholesale merchandise. Here’s why.
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Direct Liquidation is offering these products directly sold by top retailers, such as Walmart and Amazon. These companies liquidate their items directly to smaller customers who are interested in buying these overstock pallets. By doing business through the Direct Liquidation platform, you will be purchasing wholesale products without the usual wholesalers’ mark-up, and therefore, at prices lower than typical wholesalers.
Moreover, you will still be able to evaluate the condition of the products you are buying by checking the liquidated pallet’s manifest. This document provides you with information on the type of products, their quantity and quality. If the items were refurbished, you will have a money-back guarantee and extended product warranty on top of every other advantage.
On the Direct Liquidation product pages, you will find the manifest as a download link below the main image of the pallet.
It is important, however, that you only do business with reputable liquidators. Among the largest liquidators worldwide, you will find Direct Liquidation. Some of the best-known companies liquidate their inventory with Direct Liquidation. These companies include Amazon, Walmart, Target and Lowe’s.
Issues When Purchasing and Selling Surplus Stock Online
Selling surplus stock is not without its challenges. It can be hard to tell what exactly you are getting when you bid on a pallet. Some items can be broken or faulty or need repairing or repackaging. Sometimes, even products classified as “new in box” might be dirty for being shelved for a long time.
The condition of the product you are getting makes a huge difference on your profitability. That’s why the accuracy of a pallet manifest is very important. On top of that, by working with a reputable liquidator, you get the peace of mind provided by their commitment to their hard-won reputation as well as their warranties and guarantees. Direct Liquidation offers a full 90-day warranty on any refurbished product.
Suggestions When Buying from Online Liquidation Sites
- Secure a resale certificate because it is required by most U.S. online liquidation sites.
- Be aware of your costs because buying and selling liquidation stocks is time consuming.
- Understand the company’s grading system.
- Inspect the manifest and understand manifest variance.
- Consider shipping costs because these can vary widely. Take into account all options available, including the ones provided by your liquidator.
- Focus on building your expertise and knowledge in a specific product category.
- Check the expiration dates of products.
- Avoid spending all your capital in one purchase.
Marketing and Profit
If you are new to online selling, do not expect to recover your investment by making one big sale. That is not the way online selling works. You should take note of the wholesale and retail prices of every item you are bidding on and set your prices at a competitive level, lower than retail prices. Profit is counted only when a whole pallet is sold.
Even if you are not a marketing expert or do not have a selling bone in your body, you can still be successful in selling online. Here are some tips.
- Formulate your e-commerce strategy and choose the right e-commerce software.
- Engage in content marketing and put calls to action (CTA) in place because online sales usually happen after a customer clicks a CTA button.
- Create an email list and build good relationships on social media.
- Build a trusted online brand and focus on customer retention. It is more costly to get new customers than to retain an old one.
- Provide the right customer experience in every platform and keep optimizing the online shopping experience.
In addition to the usual items considered in calculating return on investment (ROI), you should also consider the cost of acquiring new customers, the cost to improve your ecommerce website and the cost associated with revamping your marketing plan.
Overall, buying surplus merchandise from an online liquidation platform, such as Direct Liquidation is a great way of stocking your business for pennies on the dollar. Giving you the greatest possible scope to make a profit on resale. Why not try out our auctions today – have a look around, see what’s on offer, and compare prices with other wholesale suppliers. You might be surprised at what you can find.
Direct Liquidation is a goTRG company.
Jordan currently works as a sales representative for Direct Liquidation, assisting businesses with product sourcing of liquidated merchandise from the largest retailers in the world. Whether you are looking for a pallet or a truckload Jordan is here to help you grow your business.
View Jordan’s Bio on YouTube.